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Lev
Lev, Tax Advisor
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I would like to confirm a few things regarding per diem meal

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I would like to confirm a few things regarding per diem meal rates. The taxpayer travels to a destination that is 200 miles from his "tax home".. He arrives the day before his vendor show to set up. He works the show three full days, (staying over 4 nites) and breaks down the day after the show to travel home. At $71 per diem meal for this city, does he get the full deduction of $71 x 4 = $284 or just the three days. And is the deduction 100%, not the normal M&E @ 50%?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

Lev :

Hi and welcome to our site!

Lev :

If the taxpayer was away from his "tax home" four nights - that means - three full days, one day he departed and one day he returned - total five days.
For three full day - we should use the regular standard meal allowance rates - in your example - $71 per day.
Travel for days he departed and returned - .the regular standard meal allowance must be prorated.

Lev :

You can do so by one of two methods.
Method 1: You can claim 3/4 of the standard meal allowance.
Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice.
So in general you would use
$71 * 3 = $213 - for full days he was away from home
$71 * 3/4 * 2 = $106.5 for days he departed and returned
Total $319.5

Lev :

See for reference IRS publication 463, page 6 - right column - Travel for days you depart and return.
http://www.irs.gov/pub/irs-pdf/p463.pdf
You can deduct the cost of your meals while away from home - but such deduction is subject to the 50% limit. The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed.
See for reference IRS publication 463, page 11 - middle column - 50% Limit.
There are some exemptions from 50% limitation - see page 12

Lev, Tax Advisor
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Customer: replied 9 months ago.


What if the taxpayer's actual costs were less than the per diem amount allowed ?


 


What if he is missing many receipts, but there is proof that he is at the vendor show by a travel log. He is a sub contractor to a Jewlery company who provides a schedule.

Expert:  Lev replied 9 months ago.
What if the taxpayer's actual costs were less than the per diem amount allowed ?
Taxpayers have a choice - either deduct actual travel expenses OR use the standard Per Diem rate. When the standard Per Diem rate is used - it doesn't matter what were actual expenses - and there is no need to keep all receipts. The purpose of using the standard Per Diem rate is to simplify record keeping and audit procedure.

What if he is missing many receipts, but there is proof that he is at the vendor show by a travel log.
Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs.
If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. However - receipts to proof your mean expenses are not required. So if there are some receipts - that is OK to proof the time and place of your travel. But as it was mentioned above - there is no need to proof amounts of expenses.

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